Both townships complained that the organization's costs have grown sharply, and that LIMC's funding formula put too much of the burden on them compared with other municipalities.

Critics called the moves shortsighted and a setback for those seeking greater local cooperation.

"They've basically become isolationist," Roy Baldwin, a former Manheim Township commissioner and former state representative, said after the commissioners' vote.

LIMC grew out of informal discussions among municipal officials that began in the 1960s, according to its website. In 1989, it hired staff for the first time and expanded its activities.

In 1995, it became a council of governments, or COG, a type of cooperative organization recognized by state law.

Normally, municipalities must adopt a detailed ordinance every time they want to share services with each other. Members of COGs, by contrast, may collaborate fairly freely, with the COG agreement serving as an open-ended authorization for joint action.

A COG is not a governmental entity and has no powers of its own, advocates stress.

"The LIMC does not dictate what a municipality can or cannot do," former LIMC executive director Michael LaSala wrote in a Jan. 6 op-ed in Lancaster's Sunday News. "It is simply a mechanism for two or more municipalities to act jointly with reduced barriers."

Advocates of COGs consider them an important tool for solving regional problems, given Pennsylvania's highly fragmented system of local governance.

Pennsylvania has 500 school districts and more than 2,600 municipalities that form a complex patchwork of elected officials, tax rates and public services. Lancaster County alone has Lancaster city, 18 boroughs, 41 townships and 16 school districts.

"Regionalism is one of the ways we get things done without encroaching on municipal prerogatives," said James Cowhey, executive director of the Lancaster County Planning Commission.

Municipalities working through LIMC helped create the Lancaster County Transportation Authority, which led to the prioritization and acceleration of several important local road improvements, said Bill Ebel, a former Manheim Township commissioner who chaired LIMC in the mid-1990s.

The organization also developed a 300-page comprehensive plan for central Lancaster County titled "Growing Together."

State and federal agencies like to see local cooperation, Baldwin said. If agencies such as the state Department of Transportation see municipalities retreating into parochialism, they will be less willing to award grants for local projects, he said.

Cowhey played down that concern, saying the region has other means of coordinating transportation projects. Nevertheless, in a time of tight government budgets, the sharing of services, planning and purchasing is vital, he said.

Cowhey said he saw LIMC making progress in that direction.

But Manheim Township was not seeing more benefit from the organization, despite significant increases in LIMC's overhead costs, said Michael Rimer, township manager.

Until 2009, LIMC cost about $70,000 to $80,000 a year, LaSala said. Municipalities reduced that to about $60,000 due to the recession, he said.

LaSala's first full year at LIMC was 2012. He said the organization took in $60,000 from members and spent $117,000, making up the difference mostly through reserves.

He said he developed a proposed 2013 budget of about $118,000, with $98,000 coming from member contributions. He called it a "starting point" that LIMC's municipal members were free to modify.

Municipalities fund LIMC through contributions based on earned income taxes and property values. Manheim Township's 2013 share would have been $22,000, or more than a fifth of the $98,000 total, an arrangement that Supervisor and LIMC liaison Albert Kling called "fundamentally unfair" at the Jan. 14 meeting. East Hempfield Township's share would have been about $14,400, according to news reports.

By comparison, the two townships' 2013 budgets are about $21 million and $14.8 million, respectively.

Manheim Township had sought to renegotiate the contributions, calling on members to share LIMC's overhead costs equally. That proposal did not prevail.

"There just wasn't any time to make any changes in the dues structure," LIMC secretary-treasurer and West Hempfield Township Supervisor Kent Gardner said.

There's nothing wrong with changing it, LaSala said. But the executive director can't do that: The members must.

LaSala said he developed a number of initiatives in 2012 designed to provide value for LIMC municipalities. The organization arranged for bulk orders of Perma-Patch, an advanced pothole repair material, saving members about 30 percent, he said.

Also, LIMC put together a prototype of a storm sewer "Good Housekeeping" program that regulators are requiring municipalities to implement as part of their upcoming permit renewals. By doing so, LIMC saved its members at least 60 percent to 70 percent compared with the cost of developing programs individually, LaSala wrote in his op-ed.

Municipalities also have started to collaborate on staff, with the city and West Lampeter Township making arrangements to share a traffic-light technician, Gardner said.

"The LIMC is in its infancy of being able to save taxpayers money," he said.

LaSala left LIMC this month, taking a job with Land Studies in Lititz. He will help LIMC during a transition period and be available on a contract basis thereafter, he said.

He called his departure a personal decision, saying, "I needed more stability" than the COG could offer.

Manheim Township Commissioners Chairman Richard Casselbury said the township will continue to be a good neighbor and will work with its fellow municipalities toward a resolution of its concerns with LIMC.

"We're hopeful this is the start of reform," he said of the Jan. 14 vote.

The LIMC will continue its work, Gardner said, and if municipalities want to return, "The door is always open."

Happy Valley’s COG viewed as a paradigm

The Centre Region COG consists of State College and five surrounding townships. It serves 85,000 residents and had a 2010 budget of $16.6 million, according to its website.

Like Lancaster County’s COG, the Lancaster Inter-Municipal Committee, the Centre Region COG has developed a regional comprehensive plan. Unlike LIMC, it operates a network of parks and community facilities, including a library and nature center.

The COG runs a fire department that protects Happy Valley for less than 12 percent of the average cost for communities of similar size, Executive Director Jim Steff wrote in a letter posted on the organization’s website.

The COG’s trash-hauling and recycling program cut residents’ costs by one-quarter; its building codes enforcement is completely self-funded through permit fees, the letter says.

Through the COG, municipalities enjoy economies of scale that make their funding go much farther, Steff wrote.

“The COG makes sound business sense,” he wrote.

A COG like the Centre Region, with its self-funded services and cost savings, is not a burden on its members, said Lancaster County Planning Commission Executive Director James Cowhey.